Chinese Premier Li Keqiang flies in to chart Macau’s new course

Sources expect casino hub to eventually become a key centre for yuan settlement for the Portuguese-speaking world

PUBLISHED : Sunday, 09 October, 2016, 11:28pm
UPDATED : Monday, 10 October, 2016, 2:24am

Beijing will set down a significant marker on Monday when Premier Li Keqiang arrives in Macau for a three-day visit, during which he hopes to boost China’s economic clout in the developing world and chart a new course for the world’s richest gaming hub.

Li will attend a top-level conference alongside the prime minister of Portugal, Antonio Costa, and leaders of developing Portuguese-speaking countries in Africa, South America and beyond in which China has invested big.

Sources have said the visit could see the announcement of plans for Macau to become a key centre for yuan settlement. Under such an arrangement, the financial sector in the former Portuguese enclave would become a clearing house for huge investment deals with countries like Angola, Brazil and Mozambique.

Some believe the importance Beijing is giving to this forum – the fifth Ministerial Conference of the Forum for Economic and Trade Cooperation Between China and Portuguese-speaking Countries – is also intended as a message to Hong Kong about the benefits of cooperation amid ongoing political turmoil in the bigger special administrative region.

Li’s arrival follows a meeting between Costa and President Xi Jinping in Beijing at the weekend where Xi said China would encourage more of its companies to invest in Portugal in areas like finance, insurance, health care and infrastructure.

It also coincides with another conference in Macau, of business leaders from China and across the Portuguese-speaking world, on diversifying the Macau economy away from an overreliance on casino revenues. Those revenues have been hit by the economic slowdown on the mainland and the ongoing crackdown on corruption by Beijing, which has brought drastic cuts to the amount of dirty money being spent at the city’s VIP gaming rooms.

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The premier’s visit will also include an ‘inspection tour’ of the territory and will almost certainly include a briefing on the state of the city’s casino industry, which is going through turbulent times.

The slump has brought stern warnings from Beijing that the city – which used to rely on the oft- questionable spending of high-rollers, largely from the mainland, for upwards of 70 per cent of tax revenue – must diversify.

Signs of greater Sino-Portuguese cooperation, with Macau as an RMB settlement linchpin, have become clear in recent weeks, with the visit of Li and Macau Chief Executive Fernando Chui Sai-on to Lisbon and the visit of the head of Macau’s monetary authority to Beijing.

A source with knowledge of the situation said: “It looks like some sort of announcement on RMB settlement is on the cards at this meeting. The fact that Premier Li is spending three days here, and the recent history of meeting in Beijing and Lisbon, is very instructive. It is a marked difference to what is going on in Hong Kong at the moment.”

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Aside from the Macau forum, the business conference in the city will draw participants from Portugal, China and the host city together in a bid to breathe entrepreneurial life into a relationship between Europe, China and the former Portuguese Empire that has a history going back more than 500 years.

Costa will deliver the keynote speech at the conference, called StartUP Macau Forum.

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Last month Chief Executive Chui, during his visit to Lisbon, said his government was studying the creation of a complex in Macau which would help promote the city as a platform between China and Portuguese-speaking countries .

Chui gave no details of the project, but its announcement came less than a month before the forum.

The only Portuguese-speaking country not present at the Macau forum is the small African island nation of São Tomé and Príncipe, due to its diplomatic relationship with Taiwan, which China does not recognise.